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Question

Statistics for Economics Question on Probability theory

Let XN(μX,σX2)X \sim N(\mu X, \sigma _X ^2) and YN(μy,σy2)Y \sim N(\mu _y, \sigma _y ^2) Which of the following is/are NOT correct?

A

The area F(X)= \frac1{\sigma _x \sqrt{2\pi}}$$\int_{-\infty}^{\mu_x} e^{-\frac1{2}(\frac{X-\mu_x}{\sigma_x})^2} dx is 1.

B

The areas under the normal probability curve between the ordinates at μx±3σx\mu_x ± 3\sigma_x , and μy±3σy\mu_y ± 3\sigma_y are 0.9544 and 0.9973, respectively.

C

For variable X,
Quartile Deviation: Mean Absolute Deviation: Standard Deviation ≅ 23σx:45σx:σx\frac2{3} \sigma_x : \frac4{5}\sigma_x : \sigma_x

D

If X and Y are independent, then (XY)N(μxμy,σx2+σy2)(X-Y) \sim N(\mu_x - \mu_y, σ^2_x +σ^2_y).

Answer

The area F(X)= \frac1{\sigma _x \sqrt{2\pi}}$$\int_{-\infty}^{\mu_x} e^{-\frac1{2}(\frac{X-\mu_x}{\sigma_x})^2} dx is 1.

Explanation

Solution

The correct option is (A): The area F(X)= \frac1{\sigma _x \sqrt{2\pi}}$$\int_{-\infty}^{\mu_x} e^{-\frac1{2}(\frac{X-\mu_x}{\sigma_x})^2} dx is 1. and (B): The areas under the normal probability curve between the ordinates at μx±3σx\mu_x ± 3\sigma_x , and μy±3σy\mu_y ± 3\sigma_y are 0.9544 and 0.9973, respectively.